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FHA home loans in Ogden, Utah, who does them - Canopy Mortgage

June 1st, 2021 8:19 AM by Nathan Rufty

FHA home loans in Ogden, Utah

Federal Housing Administration (FHA) home loans are a great option for many homebuyers and homeowners looking to purchase or refinance in Ogden, Utah. FHA home loans are specifically useful to borrowers who cannot make a big down payment, who want low monthly payments, whose credit is not great and qualifying for a conventional loan is difficult for them.

Congress created the FHA in 1934 and it became part of the Department of Housing and Urban Development (HUD) in 1965. The FHA is not a lender. The FHA is the largest insurer of mortgages in the world. Lenders are insured by the FHA against losses as a result of a homeowner defaulting on their mortgage loan. It insures single and multifamily homes including manufactured homes and hospitals. The FHA is the only government agency that does not cost the taxpayers anything operating entirely from the proceeds from its mortgage insurance which is initially part of the mortgage payment.

This program allows a first time home buyer, who might otherwise not qualify for a home loan to obtain one because the risk is removed from the lender by FHA who insures the loan. With the recent subprime lending collapse, the FHA home loans have become cool again, as mortgage lenders and brokers are flocking to the latest FHA loan programs. FHA has been around for decades, and there are many innovative programs to help different segments of the population to realize the dream of home ownership. A common misconception is that FHA home loans are for first time homebuyers. The fact is you can only have one FHA loan at a time whether it's your second home or fifth. The mortgage limits for FHA home loans are set on an area-by-area or county-by-county basis.

This type of insurance is an attractive benefit for FHA approved and authorized lenders. If the homeowner defaults, the lender gets its money from the FHA. The lender or broker works with prospects to qualify their loan application to FHA guidelines for approval for this insurance for the loan.

FHA loan guidelines also provide attractive benefits to home buyers as qualification is usually less stringent than conventional loans. Plus, all FHA home loans are FULLY assumable, adding one more layer of protection for you and your family. Having an assumable loan at a good interest rate would be part of a good plan for selling your house in the future especially if the interest rates have gone up.



FHA Home Loan Features in Ogden, Utah

  • FHA loans are backed by the full faith and credit of the U.S. government, while conventional loans are not.
  • An FHA loan may require a down payment as small as 3.5%, compared to the traditional 20% that's recommended for conventional loans.
  • On a conventional loan, private mortgage insurance automatically ends once you reach a 78% LTV ratio. With an FHA loan, insurance premiums stay in effect for life.
  • Conventional and FHA loans use different standards for borrower approval, and FHA loans are generally easier to qualify for.


FHA Home Loan Types in Ogden, Utah

  • Traditional mortgage. This is probably what you think of when you hear the words "FHA loan." It's a mortgage for your primary residence, whether it's a single- or multi-family home, and you'll choose between a fixed or adjustable interest rate.
  • Home Equity Conversion Mortgage. This FHA-backed loan is for older homeowners who want to tap into their home equity to receive cash.
  • Construction to Permanent Loan. This loan is for people building a home.
  • 203(k) Rehab Mortgage. Get approved for a mortgage and funds to make home improvements, all in one loan.
  • Energy Efficient Mortgage. An EEM lets you roll the costs of energy-efficient repairs into your mortgage without making a bigger down payment. You can improve things like your furnace, insulation, or thermostat system.
  • Title I Property Improvement Loan. This home improvement loan helps you make essential upgrades to your home.
  • Section 245(a) Mortgage, or the Graduated Mortgage Payment Program. This FHA loan is for people at a low-to-moderate income level. You start with low monthly payments, and your payments increase as your income increases.


Ogden, Utah FHA Home Loan Benefits

  • Lower credit scores allowed
  • More rigid property standards
  • Somewhat higher down payment needed
  • Private Mortgage Insurance (PMI) is required for down payments less than 20%

The following two FHA loan requirements are important for qualifying: Housing expenses should not exceed 29% of your gross income; total indebtedness should not exceed 41% of your income. FHA home loans require a smaller down payment as well. Down payments for FHA home loans are low, generally 5% or even as low as 3.5%. The finance package in a nutshell is: FHA insurance + lender financing = FHA loan. Ask your lender for assistance in learning which FHA mortgage is right for you.

FHA home loans are available in rural and urban areas. FHA home loans are not loans granted by the government, but FHA home loans are mortgage loans that are guaranteed by the Federal Government. FHA home loans are generally offered at reasonable interest rates, and guarantee the mortgage company that the loan will be paid. So whether you are refinancing, buying your first home or your fifth, try out FHA.


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